Five Northwestern students won the Federal Reserve Board’s national economic College Fed Challenge competition Nov. 30 and were awarded $25,000.
Of the prize, provided by Moody’s, Inc., $10,000 goes to NU’s economics department and the rest is split evenly between team members.
Juniors Aditya Damani, Alex Leung and Derek Moeller and sophomores Rosa Li and Josh Plavner traveled to Washington, D.C., during Fall Quarter’s Reading Week for the competition. There, they faced teams from Rutgers University and Lafayette College in front of three senior economists for the Fed in the Federal Reserve’s Board of Governors room.
Fed Chairman Alan Greenspan spoke to the students before the presentations began.
“The fact that the presentation actually happened in the Board of Governors room, where Alan Greenspan usually goes over policy, made it a little more intimidating,” Moeller said.
The competition consisted of a 20-minute presentation and 15-minute Q-and-A session. During the presentation, competing teams of three to five undergraduate students used their knowledge of the Fed and economics to forecast where the economy is headed and recommend national monetary policy.
NU’s team simulated an actual Federal Open Market Committee meeting during its presentation. Each team member took on the identity of a committee governor or chairperson.
In its presentation, the team recommended that the Fed raise the federal funds rate by a quarter point, to 2.25 percent. The federal funds rate is the overnight interest rate by which banks loan each other reserves. Moeller said the team made this recommendation because it felt that the economy is looking reasonably good, and the Fed can slow it and delay inflation by raising the interest rate.
NU’s Fed Challenge team’s prediction proved accurate Dec. 14 when a Federal Open Market Committee meeting resulted in a quarter-point increase of the federal funds rate.
Team members had the opportunity to meet with the three judges after the competition. Moeller said NU’s team will also meet with the president of the Federal Reserve Bank of Chicago later this quarter.
Moeller said he hopes to participate next year if he’s not studying abroad. He said the team will start preparing two to three months before the district competition, which takes place in early November at the Chicago Fed.
Reach Corrie Driebusch at [email protected].
